Why should you choose a home renovation loan?
Your home is a reflection of your personality and status, and renovating it is a great way to bestow your home with an aesthetic and soothing ambiance, where you and your family members can comfort and peace. However, renovating your house can put a financial burden on your finances. You can use a home renovation loan to modify, refurbish, or renovate your home without touching your savings or investments.
Home renovation loans are the best way to upgrade your dream house to a more comfortable and peaceful space for yourself and your loved ones. They come with features and benefits that you can avail of to repay the loan amount without any delays or defaults.
Here are the reasons to choose a home renovation loan:
The best part about a home renovation loan is that you can avail of a lower interest rate which has a significant impact on your monthly EMIs. It means that you can get significantly lower EMIs which can assist you in making easy monthly payments.
However, it is worth noting that the interest rate on home improvement loans depends on factors like your type of interest rate, MCLR RATE, loan-to-value ratio, credit score, location of your property, job profile, and loan repayment tenure. Also, it is imperative to convince your lender that you can repay the loan amount without fail.
As per the Reserve Bank of India (RBI), you can avail of interest deductions under the income tax act 1961. Your home renovation loan can fetch you a tax benefit of up to Rs. 30,000 per annum for the interest that you pay on home improvement loans. However, it is worth noting that it falls within the limit of Rs. 2 lakhs interest payment on self-occupied homes.
In other words, you can get tax deductions of up to Rs. 2 lakhs on home loans and home renovation loans. Out of Rs. 20,000, you are eligible to avail of up to Rs. 30,000/- on your home renovation loan. It enables you to lower the overall cost of borrowing.
- Minimal Documentation requirement
Another benefit of acquiring a home renovation loan is the minimal documentation requirement. The requisite documents required to submit along with your home renovation loan application are:
- Identification proof: Driving License, Voters ID Card, Ration Card, PAN Card, Employee ID Card (any one of them)
- Address proof: Passport, Voters ID Card, Driving License, Ration Card, Utility Bills (any one of them)
- For salaried person: three months Salary slips with ITR or forms 16.
- For self-employed individuals: Past three months’ bank statement stating transactions.
- Property title deed.
With minimal documentation requirements, the process of applying for a home renovation loan is easy and quick. You do not need to wait for too long to get the required loan amount approved. Home improvement loans enable you to apply online and get your loan processed instantly.
To apply for a home renovation loan online, you will need to submit your personal, employment, and financial information and add your preferred loan amount and repayment tenure. You will then need to submit the required documents. Allow your lender to verify your application. If everything is in property order, your loan application will be approved, and the sanctioned loan amount will get credited to your registered bank account.
The best thing about a home renovation loan is that there is no restriction on how you want to use the fund to remodel your home. You can use the sanctioned loan amount for activities such as renovation, repairs, flooring, extension, painting, etc. So, whether you want to repaint your home to make preparations for a celebration or repair your ceiling, doors, and windows, a home renovation loan can cover all the costs pertaining to the structure of your house.
However, you can not use the loan amount to repair or purchase movable items such as furniture, fixtures, furnishings, etc.
Renovating your home can help you create a comfortable space that uplifts your spirit. Another benefit of renovating your house is that it improves the value of your property in the market. However, the cost of renovation can put a financial burden on your pocket.
So, when you do not have other means to manage your finances, you can apply for a home renovation loan and remodel your house without worrying about constraining your budget. Furthermore, you can reduce the overall cost of borrowing by availing tax deductions on the interest paid against home improvement loans.